Bitcoin plunged under $65,000 on Monday after US President Trump’s proposal for a 15% increase in global tariffs.

In addition to the uncertainty brought by tariffs, current data indicates the cryptocurrency is in a phase causing maximum psychological strain for traders.

BTC Is in a “Psychological Torture” Stage

The cryptocurrency has now entered Stage 4 of its cycle, represented by liquidity dynamics, leverage positioning, and recurring investor psychology patterns, according to analysis by Doctor Profit. This stage follows a previous Stage 1 during Bitcoin’s rise to between $115,000 and $125,000, marked by euphoric sentiment and aggressive buying.

Stage 2 commenced once Bitcoin fell below the crucial $100,000 threshold, stressing short-term investors and leveraged traders. The abrupt crash on October 10 exemplified this stage, marking the largest liquidation event in cryptocurrency history.

Stage 3 was the fastest and harshest phase, confirming the bearish trend with a drastic 38% drop from its all-time peak, inducing panic and despair among investors.

In this recent downturn, Bitcoin lost 50% of its market cap due to rapid repricing. Currently, the market is in Stage 4, characterized by low volatility but significant psychological pressure. The stability of prices within a set range allows market makers to create liquidity, while participants gradually lose patience.

Doctor Profit describes this phase as being dominated by emotions of frustration and regret, leading to capitulation among short-term holders, as investors exit at loss after failing to sell earlier. He anticipates that a drop into Stage 5, indicating full capitulation, is likely in a few months, although minor price rebounds within the $57,000-$60,000 range are alive.

Anticipating Recovery

Stage 5 is expected to be the most emotional, often linked with systemic stress or unanticipated events. Revised targets are now set between $35,000 and $45,000, amidst broader macroeconomic and liquidity concerns.

The final Stage 6 should involve market stabilization and recovery as selling pressure abates, allowing larger players to accumulate while retail investors brace for even lower prices. Doctor Profit concluded that even though the sharpest declines may have passed, the hardest psychological tribulations are just beginning, aligning with trends seen in past Bitcoin cycles.